About Pennies: "A nickel for your thoughts?"

Canada getting rid of the penny—does that make “cents”? Apparently, yes. Each penny costs 1.6 cents to produce, according to the federal government.

Love ’em or hate ’em, pennies are a cause
for conversation and lately, quite a few questions. Here is a little “q&a”
on pennies related to finances at the U of S:

Q: When will we stop accepting them as a method of payment?A: Pennies are a valid form of
currency “forever” or until they are all out of circulation. However, university
business units decide which forms of currency they accept; FSD recommends
accepting pennies at least until fall 2012, which is when banks will stop
supplying them.

Q: Are there system implications?A: No. The base pricing unit in
Canada will continue to be one cent. Non-cash sales (credit card, debit,
cheques) can be made on this basis.

Q: Are there sales tax implications?A: No.

Q: In setting prices for goods &
services, do all prices have to end in $.05 increments after taxes? A: No

Q: What if tax rates change? Do we
have to change our selling prices every time? A: No

Cash sales – rounding down or up

The federal government recommends that for
total, after-all-taxes-and-fees cash amounts, round to the nearest five cents.

When rounding cash sales, record it to Cash
Overage and Shortage in account code 70604. For example, for $1.02 cash, charge
customer $1.00 and record $.02 shortage to account code 70604.

So, for amounts ending in $.01, $.02, $.06
and $.07, round down, and for those ending in $.03, $.04, $.08 and $.09, round
up (note: “0” in each can be any digit 0-9).

Units that only accept cash can:

Keep prices as they are and use
the federal government’s recommended rounding rule, above

Set prices so that the sale
price, including all taxes and fees, rounds to the nearest five cents